WaterOperator.org Blog

If you're a utility manager or a member of a water utility board, there's a good chance you've had to deal with utility rates at some point. If not, there's an even better chance that a rate-setting conversation is in your future. As the nation's infrastructure ages, many communities are coming to terms with the fact that their utility rates have been too low to allow for replacement costs. Whether you've been forced into an expensive repair by a catastrophic failure or simply know a major piece of your infrastructure is living on borrowed time, you may have no choice but to consider a rate hike and other fundraising measures. But even if your position is not that dire, utility rates have to respond to many complex factors including inflation, fluctuations in number of customers, and changing water treatment standards.

If the whole thing sounds overwhelming, you're not alone. The Rural Community Assistance Partnership (RCAP) has produced several resources to guide utilities through this process. Their handbook Formulate Great Rates provides guidance for small communities that need to conduct water system rate studies. They also recorded a 2-part companion webinar for the handbook, the first video of which is linked below. The webinars are presented by RCAP experts with experience in rate-setting and help explain some of the more challenging sections of the handbook. This first webinar is about half an hour long.

If you need more help understanding the handbook, or need a hand with rate-setting in general, RCAP's regional partners offer technical assistance for rural communities. You might also want to check out the Environmental Finance Center's rate dashboards.